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in 1935, and maybe even mid way through the 20th century anticipating longevity into our 80s b -- and for many people into our 90s is a very old-fashioned concept, and thinking about how to change that, not for those who are currently in retirement or about to be there or for generations to come is very important, and this could be part and parcel, and in a way we really counterthink about easily before we had the affordable care act. it doesn't mean, and i said, i tried as one of the opening comments, this is not medicare's panacea. there's really serious problems to face with medicare, and this is going to be it. it is really more as part and parcel of trying to recognize that the world has really shifted over the course of the last century and claim great
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appreciation more than most on the panel for having that happen, but we need to try to get this built into expectations for people who are currently working that this was an outdated concept a generation ago, maybe two generations ago. ..
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>> that is why we need to make accommodation to existing disability programs are others. but the vast majority of people in their 60s can work. the expectation has been that this is a normal and reasonable retirement age. it is one that is way out voted. >> again, in regards to medicare, we are not really achieving anything. >> at the risk of appearing to choose favorites, until that we have time for both of you to come back at them. speaking of that, we have a second bite at the apple for bob. >> thank you. we are all familiar with the
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statistics. the u.s. spends on health care than any other developed country. we hear that continuously. i was surprised to hear at a recent conference exactly the reverse is true when it comes to social support spending for lower income groups. for seniors and people with disabilities. which raises the question in my mind, would it be better for us to try to rebalance our spending in the direction that allow people to stay in their homes, functioning well instead of institutionalizing them. which is very expensive. >> we need to figure out how to spend more sensibly and efficiently in health care no
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matter what else happens. because it makes no sense. we know that it can be done in a smarter way. the question about how and how much support structures that i will say that most, not all, most of the people who are now institutionalized and long-term care and other settings, they are there because they have multiple dependencies that are difficult to treat. most of the people were who are able to be treated within the communities were moved out in a variety of programs in the 1980s and 1990s. some of the people on the panel have been involved with a lot of the work in terms of the channeling and other demonstrations that were shown to be effective. so i think it is somewhat of a
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misconception to think that we have large numbers of people who are being institutionalized and can easily be treated elsewhere. but trying to decide whether or not there are ways to change the max -- it is certainly fair enough. whatever we do in other areas of spending, we can find ways to have a more extensive health care delivery system. we are just struggling to figure out exactly what that looks like and how to get there. >> one quick point. we can take more care of people and a home setting an institution. okay? >> i might ask, as you were getting ready to ask your question. we are going down to the last few questions. so i would ask you to take this time and evaluation.
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>> yes, it was mentioned little bit ago. how many americans are living longer? but not necessarily because medicine is keeping people alive in things and things like that. there is a very big difference between being eligible for disability and be able to get up and commune, get your job, stay there for eight to 10 hours and can you back. so while yes, we are living longer, it doesn't mean that people are suffering a lot with chronic conditions that don't necessarily enable them to work full-time. to really support themselves at a higher age. how much has really been studied. not just age we the age we are living too, but the quality of life.
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>> again, those who cannot work beyond the age of 62 years old. it is not just about visible condition. it is about the eligibility of jobs, whether or not employers are trying to the incentivize them into the workforce. many employees don't want to work full-time, they only want to work part-time. they don't just go from working 40 hours per week and not working at all. so all of these things are changing right now. we do have a healthier population. we are also having a less healthy population. due to obesity and diabetes. when i mentioned earlier as there is a very significant difference in life expectancy. higher income people are seeing significant gains. they are likely to have less
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physically demanding jobs and have better health care. and they have been growing significantly, while those at the low end have not. >> the direct answer to your question as there are people who have looked at the questions, and there are surveys that are done in attempt to find out the answer, as to whether or not people in terms of their health status and whether or not they retired -- there is some information always available. in terms of individuals and their ability to carry on daily function. >> okay, go ahead. >> [inaudible] >> why don't you go ahead and
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wrap it up. >> i think we are going to wrap up this discussion today. i don't know that we have come to any conclusions, but that makes us fit right into washington on this topic. we thank you all for coming. before you leave, i want to do a plug for a new timeline. a video timeline that is going to be posted today on our kaiser family foundation website. so for those of you who are looking for a fun way to learn about the program, i think you would find it educational and i know everybody likes that. i want to thank ed for having this discussion today. thank you to the panel is for coming and sharing your thoughts on this perspective. i believe it to ed for final comments. >> two things, one is stability evaluations, thank you for this great discussion today.
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[applause] >> for doing so well, we are going to for you from the obligation to come to any more alliance seminars this year. [applause] >> happy new year. >> yes, happy new year. [laughter] >> up next on c-span2, a debate on how to improve the quality and safety of health care in the united states. then a senate hearing on the impact of hurricane sandy on small businesses. >> senator daniel inouye died today of competitions in washington. senator inouye was a world war ii veteran, a medal of honor recipient, and the longest serving sitting u.s. senator. he was 80 years old.
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>> if we turn away from the needs of others, we align ourselves with those forces which are bringing an end to suffering. >> what happened, we ought to take advantage of it. >> obesity is nothing short of a public health crisis. >> i think that they serve as a window on the past. what was going on with american women. >> she is really one of the few that we can trust. many of the women who were first ladies were writers and journalists and they will both. >> in many cases, they are more interesting as human beings.
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if only because they are not first and foremost to find as limited by political ambition. >> dolly madison was loving every minute of it. >> you can't rule without including what women want and have to contribute director in a statement, you are a little breathless. and too much looking down. and i think it was a little too fast. not enough change of pace. >> yes, ma'am. >> probably the most tragic of all. >> she wrote in her memoir, she said that i never made any decisions. i only decided what was important and when to present it to my husband. now, you stop and think about
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how much power that is. that is a lot of power. >> it is to fight the fear that accompanies the disease. >> she transformed the way we look at these bugaboos and made it possible for countless people to survive and move forward. i don't know how many presidents realistically have that kind of impact on the way we live our lives. just walking around the white house grounds, i am constantly reminded about all of the people who have lived there before and all of the women. >> first lady's influence and image for a new series on c-span, produced in cooperation with the white house historical association. presidents' day, every 18.
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>> next, a conversation on possible ways to improve the quality and safety of health care. topics include social security, medicare, medicaid, and the so-called fiscal cliff. this hour and 40 minute discussion is hosted by the new american foundation. >> i think we can get started. people are still coming in. thank you all for being here today. i know that the week before christmas break is kind of a tough time to think about health care reform. but here we are. before we get started, i would like to thank pascoe metrics and doctor marty macari. read on accountable not just because it's free. read it because it is really
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good. i have spent a fair amount of time in hospitals. and doctor mccarty shocked me. it is a very good book. i am shannon brownlee. i am a and. >> i am an instructor at dartmouth. we are working on some of the cultural components of health care, which are crucial we important. most of the debate has focused on coverage until now. that is the debate that we went through during the first obama administration, leading up to the passage of the affordable care act. and i hope that we will not have to revisit the question of coverage again. but i do have one comment. only in america can this be
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considered a right and getting access to health and health care as underprivileged. until we see this as they write, many of the reforms that we are going to talk about today may be very difficult to achieve. so the good news is -- the good news is that the conversation on health care has expanded quality and safety. americans are increasingly aware that the quality of the care they receive is not what it should be, especially considering how much we pay for. and they are getting a glimmer of understanding that hospitals, they are not necessarily very safe places to be. doctor marty makary's book is an excellent example. an industry can't be productive until it is efficient.
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we are in the dark age when it comes to basic industrial efficiency. why has this been so slow to impact the lowering the cost? why has this been such a neglected thing in health care policy? other sectors of the economy have streamlined the process using systems like the toyota production system, which helped make toyota one of the most profitable car companies in the world. and a board member at the new america foundation, in his recent article in the new yorker, the industrial processes like that of the cheesecake factory. we need to talk about this crucial aspect of improving health care. but i would like to leave you with a thought that we may have time to discuss today or may not. but it's something that we need to think about very carefully. the hospital industry is deeply in debt. to the tune of about $1 trillion
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in hospital bonds. equal to about a years worth of revenue. most of that borrowing is going towards expanding capacity. it has gone towards capacity in the past. more cath lab is an intensive care and ct scans. there is a day of reckoning coming. that is when hospitals will have to justify the expansion, and it's coming soon. because today, hospitals are facing the perfect storm, if you will, of financial pressure, coming from three different directions. number one our public payments. congress has been talking about controlling medicare and medicaid spending for decades, and the leave now, as the federal budget becomes exclusively focused in washington, doctors and hospitals will have a hard time avoiding the cuts then everyone is ari started to feel. so those cuts have begun. things like readmission penalties will start eating into hospital revenues.
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on top of that, rumors that academic medical centers may seek cuts for residency programs. these are the training programs for young physicians. that may be part of the fiscal cliff as well. and if or are going to be other cuts and matt, it is hard to imagine what they will do to affect hospitals. private pairs are stepping up. some of the big ones are now taking a much more active role in finding cheaper and better care. wal-mart has a center of excellence. wal-mart employees will be able to get propagated procedures like bariatric surgery at low cost institutions. the company will fly them out to the mayo clinic and scott and white in texas, and they will have no copayment and the company will save money by sending them to high-quality places. the third is that we are going
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to understand that getting the best care doesn't mean spending a lot of time in a high-tech cath lab for icu unit. the best care keeps people out of the hospital in the first place. that's not to say that you don't need an icu at the time or a stay at times. one of the things we're learning about his community-based care that keeps people out of the hospital. and it means that people need social support. they need to stay healthy. it is happening it pleases like puget sound in washington state and intermountain helping utah. with these examples demonstrate his better community care and better health. it is great for patients and payers, but keeping chronically ill patients out of the hospital
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is a huge source of revenue for the hospital. these resources of downward pressure represent a triple threat. in the face of lower revenues, hospitals must become more efficient. beyond that, some hospitals will have to shrink or workloads. we have too much excess of five in many parts of the country to keep running them at full capacity. the hospital industry is inevitable, but we do have a choice. we can see where it's coming ahead and try to wind it down. deliberately and intelligently, or we can let the market keep going until the music stops. when that happens, some hospitals are going to fail. hospitals are huge local employers come in when they shut down, it is not good for communities or jobs. second, the bonds are held by someone. the mortgage crisis is a pretty
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good dress rehearsal for what happens when large sectors of the economy starts default on loan obligations all kinds. while there are major differences between the hospital bond market and mortgage debt market, it constitutes as difficult to predict. finally, market-driven hospital failures are going to hit the most vulnerable they can't run locations through their cath lab to get more cash. it leaves them tightly squeezed. i want to leave you with an image. patients were sitting to people to abandon hallways. these are not just for patients, these are rich and poor alike.
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they are in this emergency room. because the hospital doesn't really make money on this emergency room. so we need to keep people out of the emergency room if we possibly can. we need to make sure its run in a safe and high-quality way as possible. we have to invest very differently. we have an ethical responsibility to protect people and an ethical responsibility to protect hospitals. so with akamai would like to introduce our speakers. i am very pleased to have marty makary, who is a surgeon and health surgery and the author of "unaccountable: what hospitals won't tell you." he was active in the development of a surgical checklist, which many of you have probably heard of, and he is a regular medical commentator for cnn and fox news. we won't hold that against him. [laughter] next is congressman jim cooper.
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a u.s. representative from tennessee's fifth district. which encompasses nashville. mr. cooper is one of the brave of 38 people of a tiny band of heroes for his work on a bipartisan budget. he really knows health care, and he is born am bar none the smartest person on the hill when it comes to thinking about it from a legislative perspective. doctor vikas saini is the president of the newly renamed lown institute institute in boston. he's a professor at harvard and is in the harvard school of public health. i am very pleased to say that he is also my colleague and working together on this on the initiatives at the lown institute. in april 2012, we talked about avoiding the affordable care to talk about the problem of overuse and overtreatment.
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finally, last but not least, it is my pleasure to introduce kavita patel. who is a fellow and managing director of delivery system reform and transportation engelberg center. at the brookings institution. kavita patel was that the new america foundation where she was a valued colleague and she is a practicing physician who has also worked in the white house and senate. will serve as a respondent. with akamai thank you very much. >> she defined status of the crisis. i thank you all for being here. i am a simple country doctor blessed with many friends. it is good to see some of those friends here.
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thank you all for coming. you know, in medical school, i remember learning what a nosebleed wise. they said that it was his term, epistaxis, that is when you have a hemorrhage from the nasal region. you have epistaxis. i remember saying, is not the same as a nosebleed? and they said, no, it is epistaxis. and they said what is the difference between that and nosebleed? and they said nothing, it's a nosebleed. i said can we all agree that we can switch the name to nosebleed? and they said it is epistaxis. there are different orbits talking about the same thing in health care. so i was really bothered by this kind of language that made
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medicine like an aristocracy. i have been well aware of eroding public trust, talking to patients who have been frustrated with their health care. you can talk to my dad who is an oncologist and he just retired two months ago from geisinger. as i was talking to him, it says it doesn't seem like we are connecting anymore with the general public. it seems like there's a lot of distrust. every five or 10 years, the new england journal of medicine puts out a research study that about half of all the patients that we see, what a massive disconnect, i thought. remember, my dad said write down your observations.
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these stories that i share with friends when we go out to dinner, they say, you know, you should write that down and put it in a book. and really, that is all the buckets. when you are a doctor and you have to become a patient or you are a nurse and you have to become impatient, the health care system completely different. it is almost as if you have had stepped outside of this world and look back on it. you see this giant monster. and i remember when i had an issue with my knee in medical school, and i was trying to get in with somebody who could tell me what was wrong with it. i felt humiliated. i was being ping-pong around from doctor to doctor. they did not want to deal with
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me. i didn't that one of the classic conditions in the book. the x-rays didn't show anything. it took a long time for me to find somebody who sat down and listen. someone who did a good physical examination and essentially, it would be okay for me to go on and choose surgery as a profession, i was worried about standing up. this other doctor, the other office said that -- but for that you have to go down to some basement where it is dark and spooky. sort of like a rundown bank teller window.
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i remember asking for a copy of my records. i remember when i went back to the floor, i have to make a photocopy and she asked, who are you? why would you want to do that, trying to get a copy of this? and i realized that, you know, from the perspective of those of us delivering health care, it can seem like we are delivering state-of-the-art care. it's doing amazing things. from the perspective of a patient, sometimes the field can appear to be a closed-door culture. and there is no villain. it is just that we are all doing our little jobs, but it's not
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very coordinated. i asked the patient about a year ago and i was interested in this general subject of "unaccountable: what hospitals won't tell you" medical care. and i said just for fun. and i said, coming to you chose to come to this hospital. and i thought, okay, and the next patient i asked in the clinic that morning, i said, why did you come to johns hopkins? why did you choose this hospital? and she said that my mom was born here. and i said, okay. and then i asked someone else and they said, well, the parking at mercy is really rough. and i thought, what is going on here? we are hearing this is one fifth of the u.s. economy. it is a free market, no matter what anyone says about it being a communist system or socialism.
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people choose where to go. they put billboards. and they have valet services at the lobby of the hospital. it is a free market that is dysfunctional. when you've got outcomes that are superior in patients telling us, we just come here because the parking is easy, the competition is there, but it's at the wrong level. and now, as a society, we have to ask ourselves the fundamental question. that question is, do we believe the public has a right to know about the quality of their hospital? i think that they do. for the first time ever, we have ways to measure hospital performance.
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and it makes sense. so for a long time, we haven't had good ways to measure hospital performance. as a matter of fact, many of us have protested the messages were crude and they were not exact. they would punish many of us. many doctors would take on patients that were obese from low socioeconomic status, patients that we know will have a tough time with all of. and the outcomes are going to look back. we guarded the public availability of data for a long time. that was a part of that. but now we have new metrics. the field of measuring quality has matured.
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the doctors groups have gotten together and create formulas to measure quality in ways that are fair and risk-adjusted. we have cardiology professional associations and the times when you say i am having chest pain to the time when you say you have an ekg is a marker of quality. the surgeons groups have come up with formulas to measure complication rates. and they are measuring complication rates, and it turns out that some hospitals, the complication rates are 400% of that of other hospitals, all of which are good hospitals. now we have a dilemma as a society based on these advances in the last two years. we believe the public has a right to know about the quality of their hospitals. and i think that they do. i think that we have had these
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metrics leaking out to the public and state department of health up with some of these metrics up. but if it is not easy to understand and readily available to consumers, it hasn't had a big impact. for the first time, we are seeing hospital safety score, consumer reports health websites serving as a master board for patients to look up the quality of their hospitals. that is one thing we are seeing for the hospitals being compared. that is all i really had to share. i just wanted to say that i'm really honored to be with such great experts. thank you for being here. [applause] >> i am the one who feels honored to be here. i am a huge fan of shannon
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brownlee. i hope everyone reads the book "unaccountable: what hospitals won't tell you." now we have a new and exciting individual, marty makary. his book was spotted by me a couple of months ago. i'm going to use it at my class and schools at vanderbilt university this winter. who wouldn't want marty makary as their doctor? to be fair and calm and intelligent and balanced, also to understand the system. it is extraordinarily important. our physicians need to be able to do that. unfortunately, talking to you from a policy perspective, that is not nearly as exciting. i don't do kiss and tell. we have to work to save social
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security, medicare, medicaid, and the entitlement programs. magical thinking doesn't save the programs. local speeches don't change the programs. chickening out doesn't save those programs. unfortunately, in a political environment, normally we follow the path of least resistance. that means that the medicare program will be out of money in 2024, which is not that much further away. social security itself will be out of money by 2033. those are deadlines we must start adjusting now to me. these are vast and important programs. they are not trust fund
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dependent and they are harder for counts to comprehend. but it is possible this programs are actually in worse financial shape in a weak economy is just the we don't have the tools today to even measure. we love stories with happy ending, i'm on social security and medicare and medicaid in the best way to do that to start acting appropriately and the way i calculate it, $11 billion and this is a shocking realization in the cost of our dithering could fix the problem. but because we are unable to confront reality, the problem
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grows worse. this is a very important one that needs to be implemented. it is another extraordinarily important thing. some people think that the fda tells you what is worth dying, it doesn't and it never has to read it only tells you what is a poison or what is a slightly better option than a placebo. that is not good enough to know it there are so many changes and
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elements of this bill that are important. but they need to be properly implemented. of course, things that are more fun to talk about could be cost enhancers. we have to get health care and slowing the rate of growth. we can slow the rate of growth to inflation plus 1%, have solved two thirds of the problem. it shouldn't be that hard. health care has been going on inflation plus 2.5%. it is really just that small difference that makes it. the most powerful force on earth is not nuclear power, it is compound interest.
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we have to get these big numbers right. so let me mention two other categories you they are not as much fun to mention and i didn't trouble by even breathing. and it is important for my destination and leadership that is expanding what can be talked about without embarrassment. they put out a book in 2008 on health care policy options. the amazing list of favorable endeavors not that it is an exhaustive list, but it is a great beginning point. some of these ideas were into this with simpson-bowles. it is also important to realize that other policy ideas, such as premium support, and i'm talking about premium support [inaudible]
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>> ideas like this need to be examined to keep medicare fee-for-service is an option, it should be more closely looked at and it has been. one of the most exciting things that is going on right now is the work of understanding the delivery of quality care in america. understanding geographical variations, the institute of medicine and self is part of an amazing project right now. a blue ribbon panel, and there is great hope that it will provide some sense of geographical equity, which was country has not had before. let me mention an even wilder category, and i will divide these into three legal lifestyle and professional categories. many of us focus on health care economics, we talk about hair rate disclosure. the medicare data is accessible. it is kind of shocking that for
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years we didn't even really understand how dialysis company, major industries like that made money. we need to amend the federal patent law to amend fraud. the federal government is the fastest player in the country and that's great, but it also leads to fraudulent payments sometimes. we probably need to update the definition of disability. it hasn't been updated since the 1950s. also, cost reimbursement as a means to getting things under control. it is amazing how almost every state enjoys the medicaid system, not to medicaid beneficiaries, but to dauphin. the federal employees health benefits program.
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the competition was held. how many people know that blue cross blue shield has gotten a $3 billion from the government every year since 1986? the blues and only the blues. how is this fair? other things, probably the federally qualified health clinics that need reform. the tax exemption for 85% of american hospitals. this is a subject, even senator grassley is willing to talk about it. in terms of lifestyle choices, obesity is a scourge. how about honest labeling? how about if you take up two seats coming up to buy two tickets. how about tobacco settlement funds on smoking cessation. only 2% of that money, the public health windfall is actually spent on its intended
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purpose. 90% is spent on other things. one of my favorites, tv for children from how about it is powered by an exercisable. people burn calories while they are watching. doctors taking leadership that they i wish we could empower doctors to say no. sometimes that is very necessary in a clinical setting. you know, we haven't even gotten complete implementation in the form of checklist yet. we need malpractice reform. even using skilled medical technology information systems. many doctors have nurses to do all that.
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i am from one of the state that is [inaudible] if elected officials and public employers really have a good chance to lead. not by talking about it, but by being guinea pigs for. we are subject to obamacare as we should be. that is a form of leadership. an even greater form of leadership is saving these vital programs for future generations. the long-term is not a long way away. it is now. the long-term is solving the fiscal cliff problem. thank you for letting me be here. [applause] i also want to thank shannon for giving me the opportunity to be here. i am a clinical cardiologist. i have been in practice for over 20 years.
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though marty stole my line, i actually am a country doctor. i was in practice on cape cod, which once upon a time was like that. in a community hospital, i saw how things work outside academic centers and other settings. this may be a little bit like describing eloquent. i will go at it from a different angle. the first thing i want to key off is something that shannon said about productivity. i think there is a fundamental paradox, at least in health care when it comes to productivity.
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if you are in a hospital and you are making process or procedures, you can apply this process. but the reality is, marty told you a story that gets to the heart of what clinical medicine is like. which is finally someone who sat down, took some time. and with a history and a physical, figured out enough to get marty to where he needed to be. now, that is extremely efficient. but in many ways, that takes more time and not less. the real question is how do we
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parse time and how we do it in a way that optimizes efficiency of productivity. when we do that, we have to keep our eye on the ball. what are we producing? a reproducing procedures or are we producing help? if we are producing health of our communities and workforce, that come in fact, what we have to be thinking about is how hospitals and in that environment. that is a very different frame of reference. so i think that is an important thing for all of us to keep in mind. at the microscopic level, the interaction between the doctor and patients in the exam room, exactly what marty described, in
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regards to this gathering opportunity that exists. if we were really to change many things about how we practice medicine. i certainly agree that doctor letterform is important and necessary. but i also think that my profession has dropped the ball a little bit. i think that may be changing many of you may know that choosing wisely has been pushed as a campaign. which has elements that i think
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can be expanded enormously. i think clinical community can own some of the problems, especially those of appropriate care. it has been far too much part of bypass surgery or spending too he found on the basis of actual outcomes. in the last five or 10 years, we have finally started seeing clinical trial data that supports some of what we have been saying. not a day goes by when i don't encounter patients who been told they need a bypass. they haven't even had a stress test. you know, or patients that have no symptoms.
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those that have an imaging study and don't quite understand the rationale for the past of moving forward. but they end up on an assembly line, very much like any of us when we become patients of the system that we have. so i would like to put a plug in for a renewal of the doctor and patient relationship is part of that. because i think in many ways, there is a lot of leverage. the institute of medicine, from their work on the waste in the system, the article in the journal of the american medical association. the figures are staggering. they are in the two and $300 billion per year range. getting from here to there is clearly scary. also a major challenge in terms of a transition. what if we were able to do that,
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i think a lot of the fiscal problems that we are facing that are causing such conflict, actually have a chance of being solved with what we all want. which is better health care. at less cost than the same outcome. so i think that is important. in that regard, i think we are beginning to see something. some are beginning to look at the community in which they operate in the level of community health. on friday, talking about the interesting interventions, deploying the right interventions and investing the right way, they can have impacts on things the public health people traditionally that they
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couldn't. medical care systems can do that. that is also a cause for optimism. in my view, the only way that will get turbocharged is this care organization and hospital system that is truly held accountable not just for the people who walked in the door. but the care of the communities. i happen to agree with shannon brownlee. we are probably having too many hospital beds based on the kind of system that would really be a learning system that optimizes the value.
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i think the horse is out of the barn on that one. these people being sent to mayo clinic for other significant hospitals, that will have an impact. in some areas from the hospitals are going to take a hit. many of them really should just be [inaudible] wouldn't you think? i think that we face a real challenge and navigating it. maybe we need this kind of approach for hospitals. i think there is good evidence in the public health literature that medical care achieves good health outcomes. much of the rest is really
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nonmedical care, and it is a lot. it has to do with prevention, it has to do with lifestyle. it has to do with how we organize transportation and i think everyone here gets that. but i do think that one big problem that we have to address when think about is that the return on investment of those kinds of investment is very long. now, jim is going to laugh. i used to think that the return on investment for so long that you couldn't really expect insurance companies to take on that kind of investment and prevention programs. labor force is so mobile. they would lose their premium paying customer before they would reap the benefits. and i used to think that it ought to be the government. they have a long-term view. i guess not. i mean, effectively, the view is
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the election cycle. so we have a problem. how do we make those kinds of long-term investments? but if we do, and some of the payoff from prevention, which i know is disputed quite often, some of the payoff can actually be realized. they can be realized in the short term. so i will stop there. [applause] >> well, i have the most fortunate job. i get to react to everything. i'm going to offer -- by reacting, i actually want to try to blend a little bit what is being said, i would like to acknowledge shannon and others in the room. and marty makary has written the best books. and it talks about innovation and how the va emerged as a
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system that had been a last resort to the most principled choice of care. one that i think sets the trends. part of my training, we seem pretty doctor heavy on this panel. and i realize that that is not intentional, but it certainly speaks to the culture of medicine and certainly, i was often told we have stories from medical school and the powerful thing that i have is my pen. now is probably the enter key. it drives me crazy with my electronic medical record. and i practice full disclosure at hopkins in washington dc, which is another conversation that i wanted to touch on. and i think that it is still true, however, that we, as physicians, we initiate so much of overtreatment and in many cases, i often find myself in situations where i am worried that i am under treating or
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under diagnosing or not thinking, partly because of time pressures, probably because when patients come in, especially these last couple of weeks, it is so easy to treat with a cpac. everyone knows that this happens, and we practice this evil doing of overprescribing. i think marty's book opens up a very general audience to complex concepts in a way that is very approachable. i think mr. cooper had somehow that causes a real call for policymakers to actually do something about it. so the more the public understands about how screwed up our health care system is, the
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more it is incumbent upon those of us who live and work in this town and feel like we represent people's interest certainly an elected official, and those of us who focus on policy on our day-to-day lives. we are really stuck holding the bag and saying, what do we do about it? we have this multibillion dollar problem and what we do about it? i think that shannon and representative cooper and marty makary hit on a few points. i wanted to weaken some of the clinical policy by highlighting some of the future trends. at africans have spent a lot of time working on a campbell care organizations and i have to tell you, several years ago when we were talking about a seo's, i thought, what is this mythical creature? this uniform, this delivery system that will fix everything. but now we have a pos. there olbermann 2 million beneficiaries are enrolled in the campbell care organizations.
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when you talk to patients, they have no idea what they're talking about. they say it is out of number, i don't have to pay them more. so the future trend is to move toward something that is more accountable. the cocoa is about medicine. this highlights a policy conundrum. ..
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to allow for that often overused phrase, innovation in health care but especially in aspects of getting care to patients in difficult settings. no money from these people, should get some i suppose if i were smarter but things that are making -- here are now looking at how to pair that with quality
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data and add to that to try to steer you to doctors who are supposed to be by metrics better for you so that's a trend that will only continue. we are not going to see reversal in that and that's a good thing from a policy standpoint. we are going to have to think about how to make her medicare and ultimately our medicaid and i know that's a federal and state partnership, to be a little bit more responsive to future trends. kashif thing to consumers. there are serious conversations about health plans and purchasers and obviously centrally. there are many conversations now about how employers, especially large employers, can think about reducing costs. while these programs certainly have their place in the affordable care program is a piece of that possible for tax deductions to make that's a more attractive incentive on top of
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that fair bottom-line quarterly report investors who need to have returns on their shares and we are starting to see at the johns hopkins employee health plan has moved next year, move to a higher deductible plan and a tight network where it used to be you saw someone in the system and there was zero co-pay and now they have implemented a co-pay within your own system. this is just one of a series of trends while we are trying to bend the cost curve and do these amazing redesigns of care and still presents a huge challenge that i think is all the more for responsive policymaking but then responsible clinical leadership and i can't say enough about that. and then there are so many things that are kind of, i have never met more medical students who were comfortable being employed and salaried and i'm not here to tell you that is a good or bad thing but i will tell you that certainly in my
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community practice, most of the physicians, i'm the youngest in practice and i'm pretty far out of medical school. most of the positions in our press -- practice for purchase lock stock and barrel and calculated when they would retire and just get to retirement and they get out of the system or their turn there tried to calculate how much income they can make and skip tuition and things like that. if you take stock of people coming out of school or residency you will see the majority of them are comfortable being employed and thus being salaried or having compensation done differently then i productivity manner and number two they are much more comfortable with electronics, much more comfortable with interacting in a different mortality than a white coat and an office. i think that is positive. i do worry however, given the kind of concerns that shannon
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raised in hospitals needing to meet margins in deficits and where they see opportunities as well as what i see every day in the real world which is that if you are purchasing or order buying up the cardiology practice or you're buying a play primary care physician, there is certainly an understanding about a referral pattern within the purchased doctors and their certainly, and certainly nobody is doing anything i hope illegal in this regard because physicians are free to go as mark mentioned where they want but the truth is, every time i get asked, do we agree that a person needs to be a special as they say to me, where should i go? they rarely come to me and say, here is who i want to see from my orthopedic surgery referral. they often look to me and if i'm working in a system in which i'm incentivize to keep people inside of that system that may be a good thing but if we are only promoting the same kind of
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overtreatment and unnecessary procedures and putting them down the cardiology list without being thoughtful as to what that means, we could see potentially in the next generation of health care, we could see these cross in a very different way than what we talk about right now in the fee-for-service setting. i do think it's important to have a very -- i couldn't agree more about transparency and great settings or at least having amount as conversation about how money changes hands and how private pay contracts help to subsidize an offset, medicaid and medicare which is all very real to most people in health care and i think it's books like marty's and books like shannon said books like phils who bring the dialogue into a general conversation that also intersects with education, labor, employment opportunity that is critical so i look
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forward to any questions and hopefully we can delve into more. thank you. [applause] >> i am going to take the moderators prerogative and throw out the first question. you need to empower physicians to say no. i would like to ask you and dr. saini to talk about that from the policymakers perspective. are the things that congress can actually do that will empower clinicians to say no, and when i say no, when we say to say no what really mean is, i think something broader than simply saying the patient who comes and says, i want knee surgery but more, the ability to say, this is what is really right for the patient despite what my hospital may need me to do and i talk in the book a little bit about the hospital putting pressure to do
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more procedures because that is how the hospital makes money. so for the clinician to be able to steal all the voices that are saying give more, you make more money because your hospital makes money but also in the patient comes to you. mr. cooper can talk about policy things but first i would like dr. saini to talk about clinicians because she has been doing that for a long time. >> first of all, it is a rare date that a patient says and i want x. you know the parts of being a professional is to put your information knowledge at the service of the other person. that is really what you're supposed to do and in my experience, you know, i can get a patient to do practically everything if i say it right, you know?
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and we know exactly how that's done. sometimes for good and sometimes not. you have the widowmaker. you are like. came now. we know how to fix this. so, i think at the heart it's about how you actually engage the patient. so i'm going to turn it around a little and say we really do need to kind of revive and resuscitate the patient. i hate to say we we are all goig to be patients and the kind of care we want for ourselves and our families is really what we need to deliver. in that regard i think one important thing is that the amount of hard, settled science in medicine is significant but still less than 50%. i don't know, what would you say? that means there's a lot of care
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and a lot of decision-making that depends a lot on conjecture and preference. and i think you know there is a movement in the land called shared decision-making and i haven't actually heard it that i am sorry to say and tell a few years ago. but in fact, it was the case that when you look at the pros and the cons, take time and ensure that the patient really understands the trade-off, it's really not that difficult for patients to come to a conclusion. what the data suggests, and i found this astounding but held morally from dartmouth shows the slide in what the data suggest suggests is if you take the country, take a region like toronto, where the rates of
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bypass surgery are low and by american standards they would be in the lower third we would say, and if you truly initiate a shared decision-making process where a patient fully understands what's involved, patient choice for bypass surgery dropped off the graph. in fact, it is the case that quite often we oversell the benefit and we underemphasized or don't engine the potential harm. and i think, as a caring profession, there's good impulse there which you know we tried not to scare people without small probability that this is real. this is where we need to trade
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it -- treat it like adults and understand what the trade-offs are. >> couple of stories and one is the proverbial case of an errant section for kid. the doctor does prescribes men about ache and it's usually viral infection and the doctor is treating the anxiety of the parents. we have probably run through 400 years of antibiotics in 40 years as a result. another example of what dr. brent james found when people wouldn't even bring babies to term and the nikkei was happy because they were full and just the simple process of determining the conception date and having a full term baby minimized so many complications and yet that was not the preferred practice and he had to persuade his colleagues to get that done. >> this is astonishing. >> at least my doctors are telling me, learning about more medication than sports scores
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and if you don't hand them a script then it's a sign you didn't believe what they were telling you. it's amazing how the transformation medicine and most psychiatric care is poll driven and not diagnosed. i think you raise -- the doctor doesn't even say no one appropriate. to help steer the patient in the right direction. >> do we have any sort of high-level policies that can actually help that process? i'm thinking fee-for-service as part of the problem here and medicare is fee-for-service. >> you are exactly right. it's not just defensive medicine where doc year's are afraid to say no and having anchored the patient but that incentive to make more money by doing more has been a pernicious but now we
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are getting away from it. but it's much slower than it needs to be. remember the time and value of money. every day we wait is a crushing economic burden. >> can you imagine working with state medicaid plans where there is effectively a capitated plan? >> medicaid advantage plans are popular today. part of that as we are paying them over medicare fee-for-service reimbursement that some of them are getting properly organized and it's interesting you can't use medigap insurance with medicare advantage plan so we are not allowing that predatory relationship to fester because the plans are smart enough to ward off that influence. i think you are slowly but surely seeing, whenever you get frustrated with america remember what winston churchill said. america can eyes be counted on to do the right thing after it has exhausted all the
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alternatives. we are in that process of going for all the alternatives right now. >> and what mencken said there is no problem too difficult that a simple solution could come up with that would be totally wrong. with that i would like to open it up to questions from the audience. if you identify yourself that would be great and we have a mite coming. >> the leo binder. the exchanges are about to come on line and we have seen major problems with the number of states declining to undertake an exchange. i am excited about this panel because you have not talked about health plans very much at all and in the past a lot of the discussion around health reform has been really around how were we going to enable health plans to compete? how are we going to ensure the quality of health plans when in fact most of his really care about quality care delivered to a strictly which is not coming
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from our health plan. so coming to the issue of exchanges and the problems we are having right now, how would you like to see transparency in health exchanges and you think anything needs to be changed about the plan going forward for undertaking the exchanges? >> i would like marty to catch that one first and then let's go from there. >> people don't have much of a choice right now with their health plans. they work for an employer and their employer gives an basically one option and that they don't like that option, then you are really inconveniencing us and we have to go out of our way and and here's the plan is more expensive than we can tell you what it's about no last year there were an record in record number of hospital mergers and acquisitions. in the hospital is providing the insurance company, think we have got to ask ourselves do we have institutions that are too big to fail? in pittsburgh, there is essentially one giant insurer of
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that area and when they had an issue with the university of pittsburgh medical center, all of a sudden you had 200,000 people who were going to be out -- could no longer take care where they have been getting their care, so that is my biggest concern with the choices that patients have, that his people are afraid of some of the things that might happen in the future, given the cost crisis, they are just teaming up in forming these giant conglomerates. >> changes have been needlessly politicized based on a federal employee shopping method that is worked great for both hardee's for courtiers and if there's one thing we can agree agree on an health care is the relative success of hbp. in a state like utah on its own chose to adopt the changes ago it's kind of a sign that this isn't a crazy leftist idea. these are all your options but
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now most impairment at the supreme court decision people want a reason to complain about something. some governors have tried to stick their chest out to make this an issue. is so disappointing because the name of states rights they are defeating states rights. how does that work wax as a practical matter we don't know today the difference between a state run exchange in a federally run exchange. is possible there is very little difference at all. my guess is any legitimate private-sector insurer is putting together the menu and the subsidies are going to be basically the same, so what's the big difference? i would like to have more states get in the game and more state acknowledgment of responsibility that the health and safety of their own residences and important issue. now it is politically popular in some parts the country to deny that. you even have one in mississippi that is stepping up and hopefully others. >> i am just have a question for you regarding the politics. i have been a bit puzzled by it has more states -- a large of a
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federal footprint in the more likely you will have uniform standards over much larger areas and that is a form of centralization that they thought was the opposite of what folks wanted. >> you are from massachusetts. what do you know about the ways we thank down south? to crazy thing, the economist in "the wall street journal" had an article showing the states that are subsidize the most by the federal government of the most resentful of federal health. this is human nature. some people liked to bite the hand that's feeding them. >> from a pragmatic standpoint we have seen the cost and the modality for transparency and the recent guidance around exchanges certainly you will still see that as a trend. in order to avoid the race to the bottom where they are waiting to see who the early
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internet exchange are and what their pricing might be and i think there has to be some aspect of caring costs and quality or at least, and some basic health letters and how to choose a plan. massachusetts did a great job and had a -- they had a fewer number of bodies that were uninsured at really used a lot of creative technique so i think that adding into what we saw massachusetts and the utah experience with exchange, some robust ways to help show the patience, there may be reason to pick a higher cost plan because of fill in the blank and there may be reasons to pick the cheapest plan in your market and here is what you should know about that. i'm not sure in any of these guidance from a policy perspective you're not going to see that level of attention and detail but there are a number of us in the room who are going to have to say let's absolutely
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make sure as people are out there, if a marketplace which they probably don't understand. they understand how to be savvy shoppers and what that means in the health insurance arena. >> i have a question. even with the exchanges, reg really going to understand what the quality of the care is that's going to be delivered by the different providers? really the exchanges are telling you about the insurance coverage but are they going to tell you anything about the care you're going to get? are you going to be able to get decision-making if you go go to x hospitaler y hospital or x doctor or y doctor. i'm not sure the exchanges will put the pressure on the providers that insurers need to put on providers or payers are putting on providers because they are delivering better care more efficiently for lower cost. >> we have got a long way to go
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but a journey begins with a single step and this is that step. >> question? do you have any comments? if you have anything, phil, i would love to hear from you. [inaudible] >> could you identify yourself? i'm sorry. i'm going to get you next. i didn't see you, sorry. >> i am a professionally changed license clinical social worker born and raised in baltimore. i worked at hopkins and -- part of my masters degree master's degree and i don't understand why people at hopkins say there is parking. there is no parking. that really kind of blew me away. if you go to hopkins, it's so well-known. at any rate let me get to my
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question. first of all i want to address two issues. one, the affordable care act. it has been race here this tort reform and so patience come to the docs and they ask for this test on that test or whatever and until there is some kind of tort reform and i can't write scripts and i have done everything private practice including working with with the military. when they come in and see this ad on tv for psych meds, for a couple of times i will refer you to a psychiatrist to evaluate you need, at drug or a test. i heard this one when i was in seattle too. you didn't put in tort reform and you get that in there and it's a real problem. we do need some changes in health care. health care. i'm on medicare now, so to
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mr. cooper and i have with me a denial from medicare. they have proved the needle but tonight the medication to go into the needle. this is absurd. for those of us working in health care, we are not surprised. it's absurd. medicare isn't that great as dr. makary in doctor saini. it can be good health care or working in conjunction with alternative treatment and confidentiality especially in mental health. i will tell you most mental health professionals are charging. are you going to charge me if i'm private practice? i don't think so. so tort reform, hopkins but alternative medicine and the issue of changing that group of
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people. the medicaid money. >> let's take the two questions to start because we tend to forget the third in and the fourth. >> mr. cooper if anyone wants to do a story, this is absurd, absurd to approve the needle and not the medication. >> all right, thank you. >> i did mention malpractice reform which is the same thing in them response to shannon's question on defensive medicine which is another way talking about it, the necessary element in reform needs to be done. i've mentioned it twice. under federal law i'm not allowed to think about it until i get a privacy act form signed by you so that is the way the rules work on that. >> dr. makary and dr. dr. saini. >> are hospital made a mistakenly ordered a c.a.t. scan
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and it ended up getting down on the wrong patient. of course i was worried they will come and sue me so i ran over to the patient's bedside and i said you know you were supposed to get a c.a.t. scan today and it didn't happen. i'm going to make sure personally dedicate done before the end of the day. i went over to the other patient's room and i said you had a c.a.t. scan today and didn't know what was going on. it was a mistake. it was intended for somebody else of some i'm happy to share the results with you if you would like. both patients look patience looked at me and said, thank you, i really appreciate your honesty. nobody was angry. people are thirsty for simple honesty in health care. that is what they want. if we can be honest with people, we will see the satisfaction and the trust and we will see that divide being bridged and we will see the tort reform problem being addressed without even trying. >> tort reform is --
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i support it. i think it's a critical element but here is why it's a critical element. to move the issue off the table and that's about it. i think most people who look at this acknowledge that most cases that should lead to a lawsuit, don't. most cases that lead to a lawsuit really shouldn't have. so there's a big disconnect there. it's also true that honest and open communication is really the best antidote. just as an aside we have been practicing a certain style of cardiology for 40 years and we have not had a single lawsuit. it is very much about how you engage and not and how you pursue it. >> i am for simpleminded question. is tort reform something that
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the states have to do or something that the federal government can do? >> traditionally tort reform is a state matter but this is one of these -- were conservatives want a national government and they want although state laws overridden so with federalism it's all state-by-state. see one of the problems with that in the states that have passed tort reform we haven't seen necessarily a drop in medicine which having tort reform, and i'm not sure that the kind of tort reform that we have so far and acted really addresses the problem that dr. saini talked about which is that the people who are legitimately harmed do not get compensation and in fact the other piece of what malpractice is supposed to be able to do which is to pull that doctor and retrain them or get them out of practice. so it's not doing the two things
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that is supposed to do and i'm not sure that we have a very good model out there yet for what would. >> this is such an emotional topic that is an hard for policymakers to be rational about it. dr. saini is right, more claims and smaller payouts unless friction and fewer transaction cost to the system. >> massachusetts has moved to adopt the so-called michigan -- essentially when an error or an outcome, an unexpected outcome takes place that is related to an error, there is immediate apology and a very rapid resolution potentially with some financial compensation. and that arrangement the option of going to a lawsuit remains but pursuing a lawsuit drops radically. >> is sometimes called the time sorry model.
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next question? yes. >> my name is cooper and i'm with -- i am taking up on dr. patel's mention. in the context of the exchange question that was raised, it seems to me, i shouldn't say simple, but the available solution for addressing many of these problems particularly from a -- point of view is centralization. the premise of his book was to
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associate every time of profit in the country and to community hospitals, medical schools, community centers and to use the leverage of that collected to move beyond the spider legs at that table to the supply led to the information technology leg, is to the insurance leg and instead of being on the defensive, which as david cay johnston's critique of the good guys in the health care delivery system reform movement, being on
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the defensive, his suggestion is that you go on the offense is to see rude reasonable reform of health care delivery system such that they cut costs and not care to patients. what they fear most is the impossible public option in the government, where they could exercise influence to -- and where their minions could favorably influence the whole. but they would run toward that if they faced in the private not-for-profit sector, a virtual single-payer system that adding
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the elements of i.t., insurance, supplied etc.. from a finance point of view, the revenue from medicaid that is being refused, the revenue from the exchange movement that is being refused, the ordinary cash flow from medicare etc., if all of that revenue were channeled through this nationwide not-for-profit health service represented by this guys look, providers for starters, you would have the leverage
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necessary to convince the politicians and industry that their safest option is the public option and instead of this truly competitive -- you can create in the private sector. >> can i compress that into a way for the panel to respond to? i think what you are saying is, is a va for all viable possibility or the medicare for all with, in effect, you could choose which system you go to, are those a viable and e would they be better systems? >> the private sector, yes you could do that but -- >> i am going to let the panel respond here. >> i have two reactions. in boston we can't get to hospitals across the street talking to each other and i am
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sure we are not alone. so, i think there is a real problem of how you would work that just sort of culturally. the second issue is really maybe more legal and i'm certainly no lawyer, but in massachusetts, with the health care law we have, thank you governor romney, there are some problems and one of them is that small businesses actually cannot band together to create the kind of scale and bulk and market power that i think is part of what you are advocating. i certainly think more leverage on the part of various actors in the system could help rationalize the negotiations but the negotiations will always still be pretty tough.
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[inaudible] >> there are certainly legal issues so that even in a not-for-profit setting, kind of an aggregation of force of providers that could be used to do exact weight what i know if he ensures modeled out, that would be one problem by your already seeing something akin to what you are describing by the states that are going forward with exchanges, having their a plan be part of the exchange option. if you think about it, what we are already doing in this incremental way and in even one state like california doing something like that has a huge effect on the market. you can see a situation where a medicaid plan which largely would have had vulnerable hacd and that is what their provider base could potentially be competitive and certainly commonwealth care in massachusetts can argue about how competitive it is or whether that's the right thing or the
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wrong thing. i think what you are describing and the question of medicare for all her b.a. for all i think we are taken at a piece -- in pieces. we are spending a lot of time talking about exchanges. medicaid will outnumber, people enrolled in medicaid will outnumber people enrolled in medicare as a result of the expansion and the growing population. i hate that term but that's how we think about it. childhood adult. so i actually think what you are describing and what phil has written about this a lot further within reach, which is what scares people. anything that powerful and dramatic can be just as frightening and that is why youth see some of the verbal and physical opposition to it. the next 10 years are going to be a fascinating time in terms of moving towards what you're describing. >> it sounds like it's actually threatenithreateni ng to the provider industry. what it means is lower revenue.
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>> exact and going to how do we do things with less money and less resources and oh wait a minute we are exposing what may be or excess that was in the system. >> on the question of -- and such, there are the are the incentives of finance. for example, a collective group could offer uniform go standardized electronic medical records and nationwide information database to providers on a cost free basis including software and equipment if there was a --
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and body you can literally take the health information component, the financial component out of the budget of not for-profit providers. that is one incentive. that is drawing separate enterprises together. secondly, on the question of savings, procurement. the economies of scale matter. if you are buying for every medicare and every medicaid patient, every private patient participating in an exchange to access this system, you have the leverage to reduce the cost of the equipment for health care delivery significantly.
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you could be talking to or $300 billion a year. that is not chump change. now, so the advantage of the collective is too big a club to be sidelined and brookings, new america and the center for american progress should be sitting down, putting their heads together with dr. berwick, who this is his approach. this is what he would do if he could. now we know who in america has the expertise. we have seen it here and we have seen it there. dr. makary i know she has expertise. >> i think you have given us enough to work from at this
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point. i think the point is very interesting. when a hospital finds a way to reduce the price say of any replacement, does it pass that savings along to its customers who are really the patient's? probably not. it saves that savings and that is increasing and i think that's going to be an increasingly important issue here, who gets to keep the money's hospitals for example become more efficient come as large entities are able to bring down the price of things that right now frankly are hugely overpriced considering the value that they offer patients. who gets that money back? right now we don't have a system that basically shares that with the community that is ultimately paying for the health care. any comments? >> at the risk of a being accused of advocating for a
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return to the cottage industry mentality, i guess you know, as there've practitioner, it's deep in my heart, the cottage industry mentality. i'm troubled by some of the scale we are seeing. i'm troubled by the fact that increasingly physicians are being employed, you know, in large hospitals and networks and i'm concerned about unintended consequences. three currently, the health care market and i speak more in massachusetts and elsewhere but it's a very -- market. we have a real impulse toward global payments both in the private sector with alternate quality care contract which is the a form of global payment as well as legislatively and otherwise. but a whole bunch of revenue remains in the fee-for-service model and in some ways hospitals themselves are living this
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schizophrenic existence because while there is a lot of potential in acos -- i mean i saw, i founded and ran a primary care risk bearing network in the '90s and i've seen that movie. there are certain limits to where you go until you get into the guts of how the system works and you can really transform it. that is a slow process but meanwhile the bulking up for in aco is leading to intended or unintended major market powers in these marketplaces in the fee-for-service side of businesses suddenly subject to forces that are not so good. so, scale is a complicated issue at least from where i sit. >> i won two and a little bit early, so i'm going to go to caroline and then paul and then one more. maybe we will not and early.
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>> i am dr. caroline poplin and i'm a primary care physician and also an attorney. i want to follow up on something you have all sort of touched on the it goes to the story that dr. makary talked about at the beginning, the personages hopkins because of parking. in the future of medical care in this country, consumers are not going to have very many choices. the way insurers try to save monies money is to have networks to restrict the patient to those networks are they get a very high premium to get out. and we have doctors now working for acos that are very large. if you want patients to engage in share decision-making and we the time it takes to talk someone out of a procedure like a psa for incense, they will not trust doctors who they feel have
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several masters. if they think you are recommending against a psa because you are trying to save money for the hospital or for the insurance company or you are trying to -- on profile, they will be concerned and if you recommend against a psa and they get prostate cancer, that is happened and there is a federal case about it. i think you have to factor that in. without the trust, the cottage industry part of medicine, it just doesn't work. >> i think your comment stands for itself. paul? >> hi. paul hewitt for the hospital for affordable health coverage. you open the discussion today within anecdote about trillion
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dollars of debt out there in the hospital set their and the need to downsize capacity to deliver care more efficiently. it sounds like that is a money-losing proposition and i know the bond markets want to hold hospitals accountable for paying that debt. more recently i think we have seen some evidence that there isn't a lot of cost-shifting. s&p recently released an update of its health care costs and a town it down for example that the professional commercial cost index of the health sector rose by 8.5% in the 12 months through september where is medicare went up 1.5% so we are seeing a growing gap between public and private cost. so medicare seek to hold hospitals accountable for their access volume, avoidable emergencies and so forth, it is
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reducing revenues and hospitals have found a way in the insurance context to raise prices exorbitantly on private payers. so we are talking about really two parallel universes. my question here is, how do we create accountability on pricing on the private side? >> accountability on pricing on the private side? that is a good question. >> i thought that's what the magic of the marketplace was for. [laughter] >> i see us want to make one comment. we have two of my research staff with us, one is a medical student and the other surgical resident, spending a year after their training working on quality and safety. we are seeing more and more students and residents say now saying now that they recognize over treatment and mistakes can harm as many people as we can save the surgery. that's amazing. one of the projects is looking
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at how many registers we have we have an health care. there are 200 registries. only three make their data available to the public even though the majority are taxpayer-funded. if people had access to this information, think you would see hospitals scrambling to be more transparent and trying to have better outcomes and provide better value for their business. if you have faith -- if you call my office and say i need a pancreas transplant, we say what insurance company to have? i have a private blah, blah, blah. we go through fighting and if you say 67, at medicare. grades, call us when you are in the parking lot and we will see you down there. there is a competition for patients and people just need good information. >> what do you think, paul? is good information going to be enough? probably not.
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my guess is that we are going to need some sort of mechanism for better price discipline on the private side. it matches something we have on the medicare side. if we tamp down on medicare costs it's going to result in the ballooning of private costs that eventually create access problems for beneficiaries. >> so do you see that as having a legislative solution, regulatory solution, a state-level solution, federal solution? what is the range of possibility here? >> right, well there are a number of administrative solution jacob or sue at the state of the federal levels. some have suggested all-payer where there is no race discrimination at all and everybody pays the same price and is negotiated once a year. my sense is is that mice be most effective at the local level. but to the extent that as you
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have a situation where 90% of hospital markets are highly concentrated according to standards, where that -- price discipline. we have mechanisms everything from utilities to antitrust to deal with that kind of thing. >> all right, we have the last question. you have the ultimate question. >> hi. i am susan and i'm a researcher at johns hopkins university and i'm not a health care provider. seems like there's as this ongoing trend that there's a disconnect between the patients in the provider and what information they use to make health decisions. there also seems to be head hint that the solution is education and it's only the patient that can be more educated. i wonder if there is something that the physicians could do to help close that gap and you guys agree that should happen? also i'm a little concerned that
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physicians just need to be more honest. if that's so, how do we educate physicians to be more honest? >> eyed him think the answer is that patients need to be better educated, putting some sort of word and a proof on them. i hope that is not how at least -- i don't think any of us are saying this needs to be -- i think of anything there needs to be transparent to because it does two things. it helps to first of all give information and have it out there whether patients use of our families or whomever needs to user, researchers such as yourself as well as a puts a little bit of fire under especially doctors -- doctors respond very well and things are posted and you are compared across each other in the practice and people say how come you are so bad at giving pap smears to your patients this year? what is it about what you are doing that makes you so bad at this and that's certainly an
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incentive that physicians respond to time and time again. in terms of getting doctors to be more honest, i mean, i think marty was born this way. i think he is always going to be this way. i don't think it matters where he works or what he does or whether he becomes a surgeon. at some level we are imprinted upon just the way, whether you believe this philosophy or not, we practice in many ways based upon our own personalities and attitudes. so much of it is subject this and how we thing. i think what has to happen is not necessarily, let's tell all the doctors to be more honest but it's got to be multipronged. professions need to own back their people. we are no longer -- physicians don't have a professional kind of cohesion amongst ourselves. we are all out there on the own for the most part. we need to come back as a professional practice.
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we need policies such as the things we have already talked about around her reform and helping to put things down so that doctors feel that they know that they are not going to immediately have somebody calling somebody even if that is a false mental belief. we need need some with having that and then third we need to have cross specialty communication. it's very rare that i can get my surgery and cardiology colleagues to return my calls or interact with me about any of my patience so we need to have more humanism amongst ourselves and that's a better place to start than giving patients more information. >> on that note, i think we'll and then i want to thank all of my panelists here. [applause]
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next-day hearing examines the impact that hurricane sandy has had on small business. we will hear from the mayor of hoboken new jersey and officials from the small business administration. the senate's small business committee hearing is an hour and 45 minutes. >> good morning. thank you all for joining us today to discuss the small business administration's response to hurricane sandy. the president's recent supplemental request and this and state and local small business recovery efforts and the impacted regions. i would like to thank our witnesses that will be testifying in just a moment and i will and should use them in just a moment. let me make a couple of brief
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opening statements. we are here today to evaluate the response and recovery efforts in the aftermath of hurricane sandy, which struck the northeastern united states on october 29, the largest sized storm in u.s. history. hurricane sandy claimed the lives of 132 americans, damaging and destroying more than 651,000 homes and 459,000 businesses. leaving more than a .5 million families without power, heat or running water. most of the water and electricity and power grid has been turned back on but i understand they there are still communities that are challenge. the scale of this disaster has created significant housing and transportation challenges and successful recovery will require a sustained effort on the part of the federal, state and local officials. private businesses, voluntary
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organizations, neighbors and survivors of -- earlier this week i had the chance to tour some parts of the in the tri-state area that were the hardest hit. i was led on that day trip by senator menendez, senator lautenberg staff was in attendance, senators tester and babbage and senators from montana and michigan to tour the area because we are concerned in senator vitter who'll be joining us today is scheduled to come and plan to but the weather delayed him so we have with republicans and democrats with their eyes on the disaster. one of the reasons we are here today however is to make sure that the federal government through the small business is doing everything in its power to assist the thousands of small businesses. that have been hurt in this natural disaster. by and large the federal response has been robust to
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hurricane sandy. more than 500,000 people have registered for temporary housing and individual assistance, fema. there on the ground, right away is provided over 15 million meals, 20 million liters of water and 1.7 million blankets and 135,000 tarps. dod has delivered 9.3 million gallons of gasoline and over 300 gasoline stations and 270 million gallons of saltwater has been pumped out of transit tunnels. there than over 17,000 federal personnel and over 11,000 national guardsmen and i want to take a minute to thank again for first responders at every level from firehouses to police stations to volunteers in the neighborhood as well as the national guard from so many states they came to the aid of the northeast. the president in numerous administration officials have been on the ground surveying damage and meeting with state
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and local leaders are going back governor cuomo and governor christie have an tenure to the capitol to express they are desperate need for help and support. i want to start with some positives on statistics in going to a few areas that i'm concerned about. one of the areas that i'm concerned about him is the fact that the sba has only approved 205 million loans to approximately 32,000 homeowners, renters and businesses. however the disbursement sound fairly impressive, the disbursement is only 6 million we want to get to the bottom of that today. i understand this numbers expected to grow and in fact since this statement was put together those statistics have changed but i think it's important to keep our eyes on the results, what's happening right on the ground for businesses and homeowners making
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decisions about when to rebuild, how to rebuild and where to rebuild. and if they are going to rebuild, it's a big decision. ..
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>> that we're not requiring the survivors to produce multiple copies of tax records that could have been lost in the storm itself. i am pleased to see we had a great deal of improvement today. by want to know to these reforms from 1.5 million from 2 million new tools to authorize a bridge loans or private disaster loans and improved coordination between sba, an irs and the mess and allowing nonprofits
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to be eligible. the first group to be turned to is the volunteers, a chamber of commerce that they themselves word devastated losing staff members. sometimes geographically. is very important to get the nonprofit organizations back up. they're the leaders of the recovery. the jobs act had a provision of aquaculture to receive economic injury loans. i hope these come in handy this time around. am pleased to report that the time frame has been
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reduced from 74-- from katrina. now they're averaging 10 days compared at 66. however reducing we need to do more to get money retired from when they were destroyed i saw literally thousands in just a few hours i was on the ground we were in new jersey, long view beach, small community
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the mayor there said they have never seen anything like this and block after block after block restaurant, a barbershop, gas station, a toy store, hairdresser come on and on completely gutted with debris. we have seen these visuals before and it is heartbreaking. right now during holiday season committees family and businesses have invested their entire life and is seasonal the not a coastal area have to make the decision if they will reopen for memorial day.
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and also the taxpayer is our goal. and will not go into the examples from those businesses but i want to hear from the leaders of the small business administration but the president said doubt the 6. $4 billion supplemental request. i am sorry. last week. now the document is public. the sooner repass the 6.$4 billion supplemental providing essentials help for small businesses, mitigation, home owners and flexible community development disaster grants is the central for the recovery of this region. after hurricane katrina, hurricane rita and hurricane gustav if they
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don't have confidence local leaders have been given money they will lose hope because the disaster is so overwhelming that is the last thing you want people to do is lose hope but to show that resiliency to believe they can rebuild while facing overwhelming odds. and to build stronger. we will get into testimony and one to call senator bitter standing in for senator snowe and to recognize him then rehab senator blumenthal and senator mendez.
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and looking forward to their comments and eyes on the ground and personal experience. >> thank you madame chair and to the witnesses. i have three points. briefly. to express my real sympathy for the support of all victims of sandy might be not homes, businesses and livelihood. and has said tragic human face and we need to keep that in mind. i am supportive of acting quickly of aid to immediately help those victims. we need to do that in a thoughtful, responsive, resp onsible way with the mayor can taxpayer in mind. second govett with the sba, there is good news and room for continuing
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improvement. we have come along way positively since hurricane katrina and rita and your response has been significantly improved. the initial response 2005 was low, and adequate to before steve preston took over and turned to the disaster program around and it has improved. we could work in this committee to enact further improvements and reform that senator landrieu mentioned. i was proud to work with her and others including the sba disaster reform 2008 farm bill. but we can continue to learn and to improve and enact
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reform and we can in this context. finally, to touch on an issue outside of our jurisdiction which is the core of engineers. it is another federal agency that is important within the disaster we have to improve the process to address real reform so we can work quickly and address needs like this. we have then working on that in a bipartisan way. we hope to have more reform in the next bill that senator boxer and i are working on now. thank you. >> senator mendez would you
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allow him? thank you. you have an ad day's show been a champion and we're happy to hear your opening remarks. >> thank you for the opportunity. thank you for coming to new jersey with several colleagues to look at the devastation on good jersey shore. and senator fitter ien -- sanders and whether deviated the flight but. >> it looked better than we would have seen. thank you for the effort to madame chair and the senator are no stranger to national disasters you have been a
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friend and ally with the less sense of katrina of. this is the worst natural disaster my state has ever faced. the surge came quickly and to a chalcis from their foundation and change the topography, devastated the most densely populated communities. two-thirds of the residents and businesses lost power, 40% of the transit riders period was disrupted and even today not only their ride but it costs them more so much more of the income comes out of the process and a countless number of small business have to clean up to get back to business. there is more than 34,000
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applications for disaster loans for the sba. they don't have the resources or capital to quickly rebuild. it could take months or weeks at the earliest to get up and says you have seen bouwer has still not been restored on long beach island. sba lonesome can be helpful but many don't have the capacity to add more debt to their books. small-business owners have told me they're ready took on debt to start up, are the great recession or repairs after hurricane irene. so those in shopkeepers the distinguished mayor hoboken is here, those that own the
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store greetings from hoboken they lost power for one week at the most critical time and could not make rent and when the shelter did not have a place they gave up stock to live up the place with candles. madame chair we redoing it is important. by a appreciate the supplemental appropriation has monday that could give us the flexibility with your experience with businesses in the louisiana when it gives them a grant could be the difference between
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getting back open or closing. also especially they are the engine of our entire economic background and also ask consent for my statement to be put into the record. >> without objection. senator blumenthal? >> first of all, i want to thank you to give the opportunity to participate with your involvement and out reach to your communities its but also connecticut and going back through 2011 and the catastrophe suffered during that period of time when you contacted me. i went them to know.
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thank you to senator vitter as well. also to the president to provide the strong leadership that he has and promptly declared connecticut in the regency arianna and permitted the sba to move forward with fema and i want to think those folks, those on the ground who have been there for quite some time, and fema officials in advance of the storm. many of the recent storms indicate we may face a new normal of this catastrophic
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weather evaded the event. we need to prepare it -- prepare long-term and short-term and that is why the suggestions and other improvements are so critically important. you need to know the connecticut sba office has approve 6.7 million of disaster assistance for struggling businesses. that figure is significant but there is a large number of requests for funding. there for a large number of homeowners need assistance for the request quite frankly is in the pipeline and we would appreciate more prompt attention and and processing.
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of month-end 1/2 after many are waiting to hear if they can repair their home and small-business owners can find out if they will have enough capital to restore equipment to breed disaster conditions. they have put their lives and livelihood back contract and deserve the opportunity i hope the supplemental will be approved promptly with the initial $250 million for sba to service the loans as quickly as possible. so hopefully we can reach out to you. >> senator cardin? >> i want to join to thank you for your the addition of ban the appropriations. we had many conversations i
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hope you will consider as early as today that is critically important to move forward. natalie small-business but to fema, department of housing come with their all critically important with those communities that have been destroyed. not as hard as new york-- to jersey are connecticut those that are much broader but if you live then the eastern shore a community one-third of the population is below the poverty level, your home's have been destroyed. you're looking for your government to help you.
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this community needs a federal partnership. it in apple asia just about every home lost power. 3,000 trees came down 30 inches of heavy snow fell down in a short period of time. they both need help and i appreciate this hearing to see how the programs could be effectively brought into play broke the two counties maybe separated but the economies are dependent on small-business. that is where people work for pro 3-1/2 to focus on how to get back on their feet to have progress that has been so disrupted
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because of sandy. also the sure the bond of all that was increased from 2 million up of 5 million successfully helped to create jobs and do with of problem a procurement due to the surety bond limits. also address that in the supplemental. the also provide relief not just to those committees affected by sandy but help small businesses do with current economic pressures. thank you for the hearing and your leadership. >> host: michael chodos is with us and responsible to
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overseas said counseling and entering and training program for current and future entrepreneurs. he will speak second and j'mison rivera the associate administrator from sba he was a disaster program but we asked mr. michael chodos to be here as he is responsible for training that will step up in the northeast to help people with the technical assistance they will need to get back on their feet to potentially make adjustments and help us stay in business. please keep earmarks at five minutes we have a distinguished panel coming a bid we will start backed in 20 minutes been a good morning chairmen distinguish members of committee come
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with the q2 invite levy sba discussion to discuss superstar sandy. we appreciate your strong support of the disaster operation and continue the addition of to make our country better equipped to deal with large natural disasters. the administrators have seen firsthand the tremendous damage caused o the northeast and it is events. of poin of the largest disasters our country has confronted since hurricane katrina more than seven years ago. i can assure you the federal government is leveraging resources to provide timely and effective assistance to all affected areas. sba works closely with response and recovery partners at fema and had. cord meeting with state and local agencies in regular contact with local officials to make sure we do everything to reach the maximum number of
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businesses/, crescenzi community. we have the one approach to the response. directors leveraging public private resources including our partners there of the affected area. we have deployed over 300 disaster customer service representatives to the region. sba is responsible for providing affordable affordable, timely, accessib le assistance with low business loans, homeowners and renters and nonprofits after a disaster. sba has made improvements to better respond to the disaster survivors. we have reduced the processing time, streamline application and implement the electronic loan application which led to more transparent and efficient application process. we continue to meet goals between 14 and 18 days.
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the case manager for each approved applications of each know the principal point* of contact if they need out. we signed a memorandum improving coordination assuring those of the unmet needs with the block grant now there is the mechanism to share data regarding the loan borrowers and grant recipients. superstar sandy disaster survivors all received presidential all disaster declaration and can apply online in person. including the fema recovery center with additional assistance from local partners. north carolina and virginia received a declaration making effective homeowners and business owners that if
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it -- available for assistance. 3600 applications have been approved a 230 million. many do not have access to internet or radio or television soap there's a customer service center they can call seven days per week with language translation. we have met more than 50,000 people on the ground. responding to over 80,000 phone calls with the wait time of less than 60 seconds. the reprocessing and call centers sba has over 300 employees working in addition to the district office and resource partners. on the ground, say are keenly focused to meet the needs of the families, businesses affected and helping to rebuild after the
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devastating storm. this is a long-term process but we will do the harder it necessary to ensure they can emerge stronger. appreciate the opportunity to update on the espy recovery efforts for superstar on sandy we hope they efficiently respond to the needs of our survivors. answer any questions. thank you. >> mr. chodos? >> they do for the opportunity to testify with infected individuals and respond from hurricane sandy incense sandy struck sba his underground providing individual and businesses with information and support
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and access to disaster recovery loans. sba was there from day one and will say about over the long term. that is why in addition to the response team went in rural development office and the vast network of counselors of partners play a key role to immediate disaster response to help the region's small businesses restart, rebuild and try again. hundreds of thousands in the affected area across the mid-atlantic and seaboard with development centers and women centers and score volunteers we were collaborative leave with us be a disaster assistance with the recovery centers to provide in take space for those in their own location and seven for racial events and committees across the area. they help to map out the recovery process and apply
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for disaster loans and connectors other local, state and federal resources from utility programs and connections with the irs broke they help small businesses take the steps to get the venturing they need to get back up and running. new york sbc had of one-stop website to provide information to provide resources for small businesses. it is now a critical tool across the state. but thousands of affected businesses will need individual help in one recent example the women business center in the bronx was contacted by a local manufacturer that
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experienced significant damage to machinery and equipment and needed help accessing capital. they applied for the disaster loan reviewed financial permission and helped to kraft a long-term plan. the process is repeated across the region and to increase substantially in the coming months. sba supported counseling and training makes a difference. they are more likely to start or survive and better prepared to plan effectively for future growth. resources partners will play a key role across the region. in addition and the sba has a comprehensive industry focused approach to rebuild the supply chain of small businesses have been hit the hardest for every small business has its own
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suppliers and vendors and thousands play key roles of manufacturers and distributors. it is a firebrand center for purchase of asian and innovation of manufacturing manufacturing, health care, finance and other sectors. with clusters and excel raiders sba knows successful growth depends on connecting small businesses with investment amen networking and supply chain connections. our clusters burper and we plan to use the we have learned to support targeted and development in the industry is across the region. sba and partners are ready on the ground to make sure those businesses get the help they need at in the days and months ahead.
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i look forward to answering questions. >> and eight opening statements senator? just for the record one of the successes post- zandi and katrina is a moller efficient application and process that toupees application and one page personal financial statement and tax information and it is important but we have more to do it without objection i put that into the record. we'll have a series of these hearings for this disaster is of long called weirdness seventh year recovery of katrina. i don't to frighten people but it is a long road with business corridors that are
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struggling. but we need to know our challenges. in new york it shows to his 65,000 businesses destroyed new jersey 189,000 is that generally the records that you have? >> that is correct. >> just for comparison with katrina and no question catastrophic disaster really lost 18,700 businesses. i will repeat the numbers 265,000 businesses lost in new york. 189,000 in new jersey. the only program by no love of the federal government
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specific to meet the needs come from your agency. we're pushing very hard for the community development block grant to change into of flexible tool which is the primary asks that we hope congress says yes to use that money to have moller robust businesses. given that, you can understand what i was concerned to hear that in new jersey we have 1,498 applicants received, applications, 68 to have been approved and only nine have been dispersed. and a york have 2,474
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applications, 105 have been approved and 12 loans have been dispersed. and the average loan was $13,000 i and a standout has increased and they move every 24 hours but just to give preference was katrina the average business loan was $1,116 hurricane willow vonage a 35,000 coming hurricane pike 129. hurricane gustav 39. the number will go up four sandy. but i want members of the committee to know the my eyes from the results, not
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the process, not people in the field, not how much money we spend. for the next year with the help of this committee on the results of getting loans quickly into the hands of businesses. is impossible to recover without small business meetings away. homeowners can build but if there is no gas stations are roche restores and the seven years after katrina barrista have neighborhoods looking for business opportunities. the federal government cannot do it all but could
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be a big supporter. wooded you please comment on the numbers? keep your response is short. >> you are correct. we're very early into the disaster normally make it more applications between week number four and week number eight. we currently process within 10 days. this is week number six we now are getting the influx the reprocess but we're confident we can get the applications processed time they and once approved will give the close same documents so the initial disbursement within five days. >> water the deadlines for application? we may have to have those extended. people are so traumatized at
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this time, they have a hard time putting their head around they have lost their home, church, a business, it is difficult to make decisions if you don't know what your neighbors are doing or the business next door. where the deadlines to have the authority to extend them? >> a current deadline of new york was extended for the whole state of december 31st. but other presidential to clear disaster we will work with fema. >> host: use a you do have that authority if you find it is necessary? >> fema doesn't it is a presidential declared disaster we will ask them. >> alaska the next panel if they believe they need more
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time. my third question, please explain in detail the preliminary conversations with the secretary of hud probably the best person in my humble opinion educated from that region, shaun donovan, where the initial conversations of possibility of express business loans to prove been longstanding successful businesses? not just opera to -- entrepreneurs taking opportunity in the aftermath to answer the question are the loans the only thing available? >> obviously he is the point* person with
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superstore arm sandy. we have had discussion on the flexibility with the memorandum to have signed but house the disaster loans have you got into that discussion? >> it is preliminary. it did survey. it is weak members six we're trying to get the best results better early in the process. >> that the collateral could be available brought up by
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senator landrieu. >> if there is a residence available you will pick that up but with the proposed language from our perspective, ribisi how that works but we do follow private-sector practices. >> is that a departure from existing policy? >> yes. we've looked at what other collateral is available. >> you will undertake that policy? >> if we can you will figure out if that is the best approach we can take.
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>> mr. chodos since the catastrophe in new york? what kind of business was that? [inaudible] >> what type of insurance? >> abizaid the availability of insurance is the key item of information obtained when a business applies for fema grants or sba disaster loans so that is part of the intake process and more broadly our resource partners take a holistic approach when a business walks in the door.
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where are they looking at the sba if i was a claims processor this would be incredibly short bookkeeping at item number 16 you don't even ask a much coverage. you have type i have not had time to study so maybe it shows up but. >> it is part of the
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application and process. so that communication doesn't occur to make sure there is no duplicative funding you want to keep it shores come mike incites come easy to flout. but it would seem to me to look at the claims they
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don't deal with that all the time but if you had to check a box with property, contents, business interruption they could check the box very quickly that would seem to be critical when you examine one of the claims. i assume you have a group that works as a claimant yes sir and they are out -- processing the application. >> are you comfortable with their areas of expertise? with the disasters survivor
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to not go there. >> go-ahead. >> but in any event in fiber you i'll funds look at the application either want to see the federal form with the phone book by like to keep it simple and you need more and for rationed madden chairman indicated there were 15,000 businesses or affected. 1% -- what percentage had insurance? >> who would have to go back and search records. i was with the agency but not at disaster assistance at the time.
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>> to head that department? >> it would seem that is a critical question. is it a ballpark? half of them? >> i really don't know. we can get that for you. >> i am disappointed. did you do with katrina to make it important howl important insurance is? >> we have a good prepared nasdaq did to with marketing at our reach. we do make loans for the underinsured losses. there is a lot of lessons learned but i don't want to state a specific percentage without knowing those numbers. >> 265,000 york. 2 jersey i am
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insurance. how many have >> people get back with you. >> you agree that is critical of people look for the federal government to step been? >> that is the process. if you have insurance we will make a loan at 100,000 we make it up front then reduce the full amount but only four underinsured losses and especiallespeciall why this day. >> thank you senator. is the insurance not given 945 that has to be attached? in addition to the two pages that we want a simple and
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complete process, there are five other forms. iras, insurance, sba and 22 '02 schedule six. i do seeing the insurance is required and very important the federal government helps to fill the gap to provide funding and advance the insurance proceeds could be slow progress on our better than others about honoring the contracts they have with these businesses that this was an important oversight the committee interest of
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sinn can provide. any of their questions? i'd like to move to the second panel. anything else? >> we have been hit with the $60 billion request. >> it came from the white house and appropriations committees. >> what part is a charitable or within this committee's jurisdiction. >> [inaudible] 40 million for the initiatives and discussed and 5,000,004 i t. >> how much was leverage of additional loans? >> approximately 4.5 the billion-dollar is for lending authority. >> who puts the numbers
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together? is that your shop? >> these numbers? is one sba approach part a bid is mine part of it is my goals than the surety bond piece of capital access. >> i assume approve want to know more how you put those numbers together we can be in touch? >> absolutely. >> lonesome it applies for the sba loan is the assurance that it at that time? >> yes. it is part of the underwriting diligence. >> derided the anybody with
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the small business loan will oversee youth compensation from the insurance company first is coming for disaster relief? >> that is a decision is small business owner has to make. we just provide one option from the toolbox. >> when you do due diligence to require their fully satisfied for losses inventory, interruption of business? >> when we speak with the agent we have what the settlement is at that time. >> i am talking before any disaster i am sorry. i am looking if somebody comes in for the sba loan. disaster on the horizon. >> the guaranteed loan
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program run to the bank's is the normal private sector practice that insurance is required. >> go back to katrina. what do you find people who have the sba loan coming back after a disaster for a loan or beef? >> for the individual already received a loan? there is the opportunity uninsured maybe they require flood insurance their baby additional coverage because of the. >> senator we could get you
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reformation on the loan program the default rate is comparable to the private sector and it is a modest subsidy in my opinion relative to the leverage that it provides as a lender of last resort. the senator has a good line of questioning insurance underlies the whole recovery process. flood insurance, homeowners' cut it met, it is expensive but required. the small business loans are to fill the gap or to get money more quickly until proceeds come in but it is important to submit how many that are successful to receive loans what is there a level of insurance
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coverage. but now let's go to the second panel. if you could stay and listen i would appreciate it. it is important to hear from the mayor's and business leaders on the ground for the first is the honorable 290 the first female mayor from hoboken and began her career as an advocate for public parks base dedica to fiscal responsibility, public-priva te partnerships and improving the quality of life. who book is one of the more devastated municipalities and no mayor can appreciate what you and your city council have been going through and reoffer you our
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best in this effort. james king from the small business development center, 1984 overseeing 35 are reached centers, serving 35,000 businesses each year and it almost certainly be called line for the job ahead of you. the president and ceo one of the most respected in a york made up of over 100,000 businesses 90% employ 20 people or less. we look forward to hearing from you what businesses are saying when they struggle to recover and how we could be helpful. but mayor, our hearts go out to the people but we will
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stay with the for the long road ahead. >> good morning. it is a privilege and an honor to be here today. i am mayor dawn zimmer of hoboken new jersey. located just across the river from new york city. more than 50,000 residents and hundreds of this disses call our city the home that is why we the most densely populated city in america of. more than a year city. we rank number one of public transportation. whereby branch committee with boutiques, restaurants, outd oor cafe. but hurricane sandy was devastating. residents for the first time the hudson her river filled
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and from the north and the south and more than half of the city was flooded perpetuity center, a public works, firehouse is an 1700 homes were flooded. total damage tata estimated at 100 million fortunately the main street did not lead and is open for businesses but those located off the main street were severely flooded. even those it did not flood have been severely impacted by a principal means of transportation, the train has flooded and has not been restored. many businesses report 60% reduction of business due to the difficulty getting to and from hoboken. some businesses remain closed or are forced to operate at the alternate location. the insurance gauntlet the
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national flood insurance program is not designed to meet the needs of your been the environment. there is the unfairness in this system that ask congress to try to address. when businesses by property they are forced to purchase flood insurance by the mortgage company but it treats these businesses as if they were basements. if they rent the direct uninsured cost is passed on to the venture. as a definition of the basement it is only limited to boiler and hot water tanks and electrical control panel systems not reflect the reality of new york city and hoboken and other areas that characterized businesses that is a principal residence is a critical vibrancy two hours city. to res a
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